Business and Investment Climate of Indonesia: Improving Competitiveness

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Indonesia Investments

Indonesia rose six positions in the 2017 edition of the IMD World Competitiveness ranking. In this edition, Southeast Asia’s largest economy was ranked 42nd. This is positive because it shows the government’s reform agenda is having an impact by improving the investment and business climate. However, Indonesia remains ranked behind its regional peers the Philippines (41st), Thailand (27th), Malaysia (24th), and Singapore (3rd).

Indonesia’s Investment Coordinating Board (BKPM), the investment services agency of the central Indonesian government, is content seeing the progress and attributes the improvement to the government’s efforts to enhance the quality and efficiency of Indonesia’s investment and business climate. For example, logistics costs are now lower (for some businesses) due to improvement in local harbors, while it now also requires less time to obtain certain permits.

This enables companies and investors to realize the start of construction and production in line with their schedule. Meanwhile, Azhar Lubis, Deputy Chairman of the BKPM, said internal efficiency measures undertaken by companies in their production process have also contributed to rising competitiveness.